Senate panel to House: No tax cuts for you
INDIANAPOLIS (WISH) — A Senate committee on Tuesday stripped almost all of the language from a House-backed tax cut bill, dealing a serious blow to the agendas of both the House and Gov. Eric Holcomb.
When the bill cleared the House last month, it included language to eliminate the 30 percent minimum in the business personal property tax and a reduction in the personal income tax from 3.23 percent to an even 3 percent by 2026. Gov. Holcomb called for the business personal property tax change during his State of the State address while the income tax measure was a House priority. The bill also included provisions to repeal utility receipts and service use taxes. At the time, the legislature’s budget analysts estimated it would cost the state a little more than $1 billion per year in revenue once it was fully implemented.
Members of the Senate Tax and Fiscal Policy Committee said the price tag was simply too high and it risked hamstringing municipal governments. Committee chair Sen. Travis Holdman, R-Markle, said his caucus was adamant about this position, and Sen. Fady Qaddoura, D-Indianapolis, said Senate Democrats felt the same way. At a Tuesday morning hearing, the committee deleted everything in the bill except for a section dealing with automatic taxpayer refunds in the event the state’s budget reserves exceed a certain level.
House budget committee chair Rep. Tim Brown, R-Crawfordsville, sponsored the bill. He said he was aware the Senate planned to make changes but he didn’t know the changes would be as significant as they were. He said the bill will go to a conference committee when and if it returns to the House.
Although the Senate committee adopted the changes to the bill, it did not vote on whether to send the legislation to the full Senate. Holdman said that vote will come at another time.
The full Senate could make further changes to the bill as well.